Housing Finance has announced that it will be diversifying into corporate lending. The new move by Housing Finance comes as the home lender looks to entrench its core mortgage retail rooting.
Housing Finance disclosed in its rights issue information memorandum that it recently lent Sh90 million to Embu Water and Sanitation Company.
Additionally, Housing Finance has also set aside an undisclosed amount for lending to 10 other counties and their agencies in coming few months.
This signals the entry into the non-property corporate lending market by Housing Finance as it seeks to boost the deposits and retail banking segment by opening seven new branches.
“The commercial banking strategy is also taking shape and has positively impacted the group’s profitability,” Housing Finance company chairman Steve Mainda said in the rights issue information memorandum.
Housing Finance is seeking to raise Sh3.5bn by issuing 116.6 million new shares to existing investors at a price of Sh30, representing a 26 per cent discount on Wednesday’s trading price of Sh40.5.
The rights offer opens on Thursday and closes on March 13, with the firm planning to use the proceeds to grow its business including the planned expansion. Mr Mainda said Housing Finance will invest Sh175 million in seven new branches this year.